This latest Budget is all about the day-to-day, childcare, parental leave, affordable housing, aged care, health, funding for TAFE and cleaner energy.
Against a challenging global backdrop of rising inflation, rising interest rates and lower economic growth, the Labor Government has focussed on practical cost-of-living issues.
This latest budget is all about the day-to-day: childcare, parental leave, affordable housing, aged care, health, funding for TAFE and cleaner energy.
Described by Treasurer Chalmers as a “bread and butter affair”, the budget aims to offset predicted cost increases over the coming years, while also addressing issues such as housing affordability and gender pay equity.
While there are no specific changes to superannuation, young families, aspiring homeowners and retirees will welcome some of the measures.
Aware Super’s Chief Executive Officer, Deanne Stewart, said this latest Budget signalled the Government was committed to working alongside the private sector to tackle a triple threat of structural problems in the Australian economy: housing affordability, energy transition and improving women’s economic participation.
A boost for retirees
Thinking of downsizing? - This budget reduces the minimum eligibility age to make downsizer contributions to superannuation from 60 to 55. It also extends the assets test from 12 to 24 months and reduces the income test deeming rate. These changes will make it easier and more cost-effective for retirees to downsize, freeing-up more housing stock for younger families.
A boost to the Seniors Health Card - The income threshold for the Seniors Health Card will increase from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined) for couples, making more people eligible for the card. The budget also freezes social security deeming rates for two years, 2024, supporting retirees who rely on income from deemed financial investments.
Improving women's participation in the workforce
The Government has made a welcome commitment to develop a National Strategy to Achieve Gender Equality, but in the short-term, two measures will have an immediate effect on families with small children:
Parental paid leave - Either parent will be able to claim the Paid Parent Leave Scheme payment, and the payment period will be extended by two weeks per year until it reaches 26 weeks in 2026.
Cheaper child care - The Child Care Subsidy will increase from 85% to 90% for families with their first child in care, and higher rates will stay in place for families with multiple children aged up to 5 in care.
Super charging a national housing solution
The governments landmark new National Housing Accord 2022 has set its sights on delivering a total of one million new, well-located homes over five years from 2024 to help address the national housing crisis.
Central to Aware Super’s investment strategy is its Essential Worker Housing Program, which began in 2018. This program offers eligible residents rent at 80% of the market rate for quality apartments close to important urban infrastructure such as hospitals, schools and transport.
The National Housing Accord 2022 will open more opportunities for Aware Super to increase the number of affordable housing developments, help to address the national housing supply issue, and pursue compelling new sources of strong risk-adjusted returns for members.
Taking advantage of these changes
There’s something for everyone in this budget, but it’s not always obvious how you can benefit personally from the changes, or what effect they may have on your superannuation strategy.
Budgets are always a good time to review your financial situation, and our expert advisers can unpack what the budget means and how you can benefit from it.
We offer simple and comprehensive advice, as well as a free webinar series where we break down the complexities of superannuation and finances into easy-to-understand topics.
Remember: we’re here to support you during times of uncertainty and market volatility like those we’re in now.
